European funds: El-Dourado or myth?

With the elections, the period of governmental vacuum comes to an end and, the typical questions arise: i) what organisational and functional structure will the government have?; ii) who will be chosen?; and, iii) whether the strategic vision within the electoral manifesto will be fulfilled? However, despite such issues, the focus should be on the responsibility of the political actors upon the usage of European Union funds.

And despite Portugal’s ratio, in terms of fraud in European funds, being lower than the European average of 0.75%, this should not reduce the level of associated liability. The National Anti-Fraud Plan cannot be theoretical or limited to theoretical practices; the Court of Auditors must have an assertive and continuous attitude of control, because the Portuguese economy will receive 133.7 billion euros until 2029.

Note that history denotes a positive rate of execution of European funds, but typically late (close to the end of the cycle); and, as such, the level of analytical demand for meeting goals may indicate bad practices. Hence, the continuous allocation of these funds is very important to avoid their return to the European Union (penalty). Dário Gaspar, coordinator of the Anti-fraud Plan, argues that it will be important to have mechanisms to streamline and reduce bureaucracy processes and information related to European incentives, similar to Portugal 2020 (coherence).

On the other hand, and quoting António Mendonça, chairman of economists, “government action is not carried out with a sum of individual measures. This has been one of the country’s main problems for the last two or three decades”; and, clearly, these funds are an opportunity to change the current paradigm of European cohesion. This is because, despite allowing the recovery of less favored regions, it is also true that they stagnate after a qualitative leap in terms of infrastructure (sanitation, road and rail, telecommunications, etc.).

This obviously requires a national strategic orientation for the best possible and responsible use of Community funds: PRR, PT2030, etc. These plans can change Portugal, although require a change in mentalities across society: i) the Government must have a holistic view, define policies and instruments; ii) the vehicle entities ought to verify the application of these funds; iii) public and private companies explore such funds as an opportunity to leverage and/or accelerate changes in order to obtain added value in the future (long-term vision).

Concluding, European funds can enable the El-Dourado of the Portuguese economy or increase its structural dependence. It’s everyone’s decision…